Floating offshore wind, despite the currently low installed capacity, could be the next frontier in wind power development in the Asia Pacific with almost limitless potential, says Wood Mackenzie, adding the total investment in the sector could be worth US$58 billion, counting the projects in the early planning stages.
“A significant market for floating offshore [wind] technology is emerging in Asia. Developers in Japan, South Korea and Taiwan have announced plans to develop key demonstration projects, although the scale of deployment is still limited compared to conventional fixed-bottom technology.”
Floating offshore wind accounts for just 6% capacity of the 26 gigawatts (GW) of new offshore capacity expected in the current decade in the Asia Pacific excluding China.
Wood Mackenzie’s principal analyst Robert Liew said: “This 1.56 GW of new floating offshore capacity in Japan, South Korea, and Taiwan will require investments of at least US$8 billion. If we consider the additional 9 GW project pipeline in early planning stages, total investment opportunities could be worth up to US$58 billion.”
Maintaining power supply is a key challenge for these markets as legacy thermal plants reach the end of their project life and opportunity for new-build coal and nuclear are severely limited, Wood Mackenzie said. The three Northeast Asian markets face projected thermal and nuclear capacity retirements totaling 89 GW from 2020 to 2030.
Liew said: “Governments in these markets are increasingly looking to renewables to fill the supply gap, but due to land constraints, scalable options are limited. Floating offshore wind is starting to gain more attention but the high cost remains a major barrier to widespread adoption of this technology. To ensure the long-term sustainability of floating offshore wind, prices must come down significantly to at least be competitive with new-build gas power.”